China Directs State Banks to Buy Stocks: Is Market Stabilization Here?

JUST IN: 🇨🇳 China orders state banks to buy stocks to prevent selling. The move comes amid concerns about market volatility and potential downward pressure on key indices.

Reportedly Chinese banks have been ordered to purchase shares in an effort to prevent further selling pressure and possibly stabilize Shanghai stock indexes. This intervention follows recent market fluctuations and aims to bolster investor confidence.

According to the Consul General of China in Belfast, Zhang Meifang, the reason behind this is to ensure stability and prevent significant market downturns.

This isn't the first time China has taken steps to influence its stock market. State-owned Central Huijin Investment recently bought about US$65 million (S$88.6 million) worth of shares in Bank of China, Agricultural Bank of China, and China Construction Bank, signaling a proactive approach to market management.

The long-term strategy involves a broader influx of capital. China will direct medium- and long-term funds, including commercial insurance funds, the National Social Security Fund and mutual funds, to increase their investments in the stock market. This diversified approach aims to provide sustained support and long-term stability.

The immediate impact and long-term consequences of this directive remain to be seen. Market analysts are closely watching how these measures will affect trading volumes, investor sentiment, and overall economic growth. Stay tuned for further updates on this developing story. This action is scheduled to continue until 26 de sept. de 2025.